Grim warnings about the future for battered oil giant BP

Thursday 10 June 2010 10:24 BST

A leading oil industry expert today warned that BP will be bust within a month as the cost of the Gulf of Mexico oil crisis spirals out of control.

Matt Simmons, a former energy advisor to President Bush and head of Simmons & Co, a Texas-based investment bank which specialises in the energy industry, said that the scale of the spill is much bigger than BP imagine.

He said: "They're going to run out of cash from lawsuits, clean-up and other expenses. There isn't enough money in the world to clean up the Gulf of Mexico.

"Once BP realises the extent of this my guess is that they'll panic and go into Chapter 11."

This may be a worst-case scenario for BP, but Simmons is not alone in worrying about the future of the oil giant.

Dougie Youngson, an analyst at Arbuthnot Securities in the City, is advising his clients to sell their shares in BP.

"There are so many questions hanging over the company and no real answers expected in the short-term," he said.

"They still haven't capped this well and even once it is capped that's only the beginning of the end.

"The key issues are the cost of the clean-up, the fines, what nasties the investigations could throw out, the anti-BP rhetoric from the Obama administration and how secure the BP position is in the US."